Mente v. Townsend

• Court: Arkansas Supreme Court
• Writing for the Court: BATTLE, J.
• Citation: Mente v. Townsend, 59 S.W. 41, 68 Ark. 391 (Ark. 1900)
• Decision Date: 27 October 1900
• Parties: MENTE v. TOWNSEND

59 S.W. 41

68 Ark. 391

MENTE v. TOWNSEND

Supreme Court of Arkansas

October 27, 1900

Appeal from Pulaski Chancery Court, THOS. B. MARTIN, Chancellor.

Decree affirmed.

Morris M. Cohn, for appellants.

There was no loan of $ 5,000. The signature of Mrs. Goldsmith was obtained by misrepresentations of her husband, appellee's agent, and the assignment is therefore void. 1 Big. Fraud 353; 38 Ark. 428, 432; 2 Hare's Lead. Cas. Eq. 1213; 14 Ves. 273; 40 Ark. 28, 30, 31; 58 Ind. 493, 498; 18 Md. 305 320; 78 N.Y. 68; 42 Md. 140, 153; 68 Mich. 116, S. C. 35 N.W 853; 78 N.Y. 68, S. C. 34 Am. Rep. 50; 42 Md. 140, 152, 153; 59 N.Y. 587, 591; 18 Md. 305, 320; 58 Ind. 493. Transactions between husband and wife are prima facie fraudulent, and the burden rests upon the husband of rebutting the presumption. 86 Pa.St. 512; 140 N.Y. 249; 94 Ala. 530; 37 Mich. 319. An assignment of a policy to be valid, must be made in the mode provided by the company. 3 Joyce, Ins. § 2309; 50 Me 96; 1 Biddle, Ins. §§ 280, 281. The assignment was void because of material alterations in the instrument by appellee. 1 Ark. 117; 9 Ark. 122; 30 Ark. 186; 35 Ark. 146; 48 Ark. 426;-49 Ark. 40; 57 Ark. 277. The assignment by the wife of insured, during his life, was inoperative. Her interest was a mere expectancy, as uncertain in ultimate value as that of an heir. 2 Col. C. C. 100; 2 Swanst. 108, 139. An heir's expectancy cannot be conveyed. 9 Mass. 519; 7 Conn. 255; 40 Pa.St. 37. The assignment by the wife was invalid. 2 De G., J. & S. 272; 9 East., 72. Cf. 59 Ark. 587; 71 N.Y. 261; 76 N.Y. 585; 86 N.Y. 11; id. 614; 100 N.Y. 372, 375; 102 N.Y. 266, S. C. 6 N.E. 667; 102 N.Y. 143, S. C. 6 N.E. 267; 115 N.Y. 152, 157; 122 N.Y. 152, 157; 122 N.Y. 337; 21 N.E. 1025, 1026; 129 N.Y. 566, 574; 140 N.Y. 457, 461; 7 So. 602; 50 La.Ann. 1027, S. C. 24 So. 16; 38 Conn. 294.

Ratcliffe & Fletcher, for appellee.

The wife cannot avoid the assignment merely because she misunderstood it. There would have to be some element of duress present. 41 A. 736; 29 A. 729; 114 Pa.St. 398; 8 Mo.App. 535; 58 Ark. 281. Appellee can not be held responsible for any misrepresentations of Goldsmith in the procurement of the assignment. 114 Pa.St. 398. Goldsmith had the right to change the beneficiary, by the terms of the policy, and that is the legal effect of the assignment procured by him to her. 99 F. 199; 60 Tex. 534; 74 Ga. 669, 670; 126 Ill. 387; 13 Daly, 255, 263; 85 N.Y. 593; 46 N.Y. 456; 12 Abb. N. Cas. 25, S. C. 28 Hun, 119; 23 Wis. 108; 19 F. 671; 12 Wis. 223; 9 N.W. 481. Even if there was any defect in the form of the assignment, that was an objection of which the company alone could take advantage; and, by paying the money into court, it has waived such defense. 2 May, Ins. § 396; 53 S.W. 602; 37 N.E. 441; S. C. 161 Mass. 320; 60 N.W. 812; 48 N.E. 1090, S. C. 170 Mass. 218; 6 Pa. Dist. Rep. 468; 43 N.Y.S. 649; 150 N.Y. 269. The words claimed to have been added by appellee to the contract were but expressive of the real contract, and not such an alteration as would avoid it. 35 Ark. 235; 5 Ark. 613-4-7; 42 Mo. 451. The burden was on appellants to show a material alteration without consent. 30 Ark. 286, 305-6; 73 F. 925; 2 Dan. Neg. Inst. § 1421. The wife had no indefeasible interest in the policy. 7 Daly, 169, 173; 44 N.Y. 159. Sand. & H. Dig., § 4944, does not apply to the case. The wife could assign the policy. 15 R. I. 106. That the husband had the right to assign the transfer, see: 47 Mo. 419; 47 Mo. 453; 8 Mo.App. 535; 56 Mo.App. 27; 50 Mo. 44; 23 Wis. 114; 38 Wis. 542, 546; 35 Ind. 188; 40 Ill. 402; 3 Sneed, 565; 2 Tenn.Ch. 269; 99 Ind. 478; Sand. & H. Dig., §§ 489, 4945, 4946.

Morris M. Cohn, for appellants, in reply.

Goldsmith did not change the beneficiary, and appellee must rely upon the assignment. 57 Ark. 632.Further, upon the invalidity of such an assignment procured by husband from wife, see: 38 Ark. 428, 432; 58 Ind. 493,498; 18 Mo. 305, 320; 78 N.Y.68; 42 Md. 140, 153; 68 Mich. 116; 59 N.Y. 587, 591.

BATTLE J., WOOD, J.

OPINION

BATTLE, J.

On the 17th of May, 1896, The Equitable Life Assurance Society of the United States executed a policy of insurance for $ 3,000, and on the 13th of August issued another policy for $ 2,000, both on the life of Solomon Goldsmith, and payable to Eugenia Goldsmith, his wife, in case she survived her husband, "or, in then event of her prior death, to the assured's executors, administrators, or assigns, subject to the right of the assured to change the beneficiary." On the 5th of April, 1898, Solomon Goldsmith and his wife, Eugenia, executed an assignment of these two policies to Sarah Townsend as security for a loan of $ 5,000 by the assignee to the assured. On the 10th of June, 1898, Solomon Goldsmith died, and on the day following Mrs. Townsend gave notice to the general manager or agent of the insurance company for the state of Arkansas of the assignment to her, and on the 13th of the same month mailed a letter to the company notifying it of the same. On the day last mentioned Mrs. Goldsmith assigned these two policies with other policies on the life of Solomon Goldsmith, amounting to $ 17,000, to Mente & Co., who on the same day notified the company by telegram of the assignment. Mrs. Townsend brought this action to enjoin the insurance company from paying the policies assigned to her by Mente & Co. or Mrs. Goldsmith. The company filed an answer in fire nature of an interpleader's bill, and paid the amount of the policies into court, and asked that the parties claiming it be required to litigate their rights in court, and that it be relieved from further liability.

1. Mente & Co. and Mrs. Goldsmith denied that Goldsmith was indebted to Mrs. Townsend for $ 5,000 loaned to him by her.

2. They alleged that Mrs. Goldsmith's signature to the assignment was procured by the misrepresentations of her husband.

3. That if the $ 5,000 was loaned, it was at a usurious rate of interest.

4. That this assignment was altered after its execution by cutting off words at the end of the paper on which it was written, and by adding words beneath the assignment as follows: "This loan of $ 5,000 is to be repaid upon notice of 30 or 60 days given by Mrs. S. Townsend."

5. That the assignment by Mrs. Goldsmith was illegal.

6. That the assignment to them was superior to that of Mrs Townsend.

The court, after hearing the evidence adduced by all the parties, rendered a decree in favor of Mrs. Townsend for the $ 5,000 which had been paid into court, and Mente & Co. and Eugenia Goldsmith, who were defendants in this action, appealed.

1. After a careful examination and consideration of all the evidence in the case, we find and conclude that the policies in controversy were assigned to appellee, Mrs. Townsend, for the purpose of securing the payment of the sum of $ 5,000 loaned by her to Solomon Goldsmith, deceased, in his lifetime. The instrument of writing adduced by the appellee at the hearing of this cause as evidence of that fact, the execution of which by Goldsmith and his wife is not denied, supports that conclusion. Other evidence, to repeat which can serve no useful purpose, corroborates that view.

2. But appellants insist that the signature of Mrs. Goldsmith was procured by her husband by means of fraud and misrepresentation. If this be so, there is no evidence that appellee was a party to this fraud, knew or had any notice of it at the time she loaned the $ 5,000. It was not procured by compulsion. Upon the faith of the assignment appellee loaned a large sum of money. Under these circumstances appellants cannot take advantage of the husband's misrepresentations. While the wife may avoid a fraud upon her as against all who participated therein, it is a rule that a valuable right of a creditor cannot be prejudiced by any fraud of the husband which procured the wife's security, if it was without such creditor's instigation, knowledge or consent. Kulp v. Brant, (Pa.) 162 Pa. 222, 29 A. 729; Johnston v. Patterson, 114 Pa. 398, 6 A. 746; Schouler, Husband & Wife, § 283.

3. Appellants contend that if the $ 5,000 were loaned by appellee to Goldsmith, they were loaned at a usurious rate of interest. But we find that this was not shown by clear and satisfactory evidence. The evidence upon this point is conflicting, and the evidence adduced by the appellants was not clear or satisfactory, and therefore is not sufficient to sustain the contention.

4. It is also contended that the assignment was altered after its execution by the cutting off of words at the end of the paper on which it was written, and by adding the words, "This loan of $ 5,000 is to be repaid upon notice of 30 or 60 days given by Mrs. S. Townsend." There is no evidence that any words were cut off, and the words added below the assignment were no alteration, and were nothing more than a memorandum. Walker v. Walker, 5 Ark. 643, 647; American National Bank v. Bangs, 42 Mo. 450.

5. Appellants insist that Mrs. Goldsmith, being a married woman at the time the assignment was made to appellee, could not at that time lawfully assign the policies in controversy to any one. This contention is based in part upon section 4944 of Sandels and Hill's Digest, which provides: "It shall be lawful for any married woman, by herself and in her name or in the name of any third person, with his assent, as her trustee, to cause to be insured, for her sole use, the life of her husband for any definite period, or for the term of his natural life; and in case of her surviving her husband the sum or net amount of the insurance becoming due and payable by the terms of the insurance shall be payable to her and for her use; and in case of the death of the wife before the decease of her husband the amount...